Newsmaker of the Year: Cloud computing

Published: December 16th, 2010

One would think that for something with so much activity around it and so talked about that there would be a concrete definition of what cloud computing is. Instead, depending on who you ask, everyone seems to have their own definition of what cloud computing means.

CA Technologies (NASDAQ: CA ) vice-president and country manager for Canada, Jimmy Fulton, summed it up best by saying “there hasn’t been a more ambiguous term in the IT industry in a long-time than cloud.”

The cloud as we know it today comes in many different flavours in the forms of software-as-a-service (SaaS), hardware-as-a-service (HaaS), infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) and security-as-a-service.

To put some perspective around just how big the cloud computing opportunity is, at Avnet Technology Solutions ‘ (NYSE: AVT ) recent IBM Partner Summit held in San Antonio, Tex. this year, Mike Rhodin, senior vice-president of software solutions at IBM Corp. (NYSE: IBM ) said the company sees the cloud as a US$67B opportunity. Rich Hume, IBM sales and distribution, global business partners and mid-market general manager for global business partners, added that IBM expects the cloud opportunity to grow seven times faster than traditional IT and will have a growth rate of 22 per cent through 2015.

Liz Herbert, principal analyst at Forrester Research in Cambridge, Mass. said one of the key drivers that are leading businesses towards these as-a-service type offerings is because of the flexibility and predictability that these models provide.

“Customers are looking for fast deployment and value-based or usage-based pricing models that are flexible enough to allow them to scale up or down as their business needs change,” she said. “Businesses also move towards SaaS because they want to create a tighter link with business needs.”

Even with these motivators though, there are still lots of worry about security and what happens to an organization’s information once it’s “in the cloud.”

Thanks to PIPEDA (Personal Information Protection and Electronic Documents Act) in Canada and the Patriot Act in the U.S., in addition to more education and awareness being put forth by manufacturers, vendors and partners in the market place, businesses are slowly getting more comfortable letting their information “leave the four walls” of the office.

With that said, based on a recent online survey conducted on behalf of CA by Leger Marketing from September 27 to October 14 that gathered responses from 525 Canadian IT professionals and business executives, it wasn’t surprising that 36 per cent of respondents said their company was using a private cloud environment, while only 23 per cent are using a public cloud infrastructure.

Microsoft Corp/ (NASDAQ: MSFT ) was another vendor that made a huge investment in the cloud this year. At its annual Worldwide Partner Conference in the summer, Microsoft announced its Windows Azure appliance , which is a turn-key cloud services platform for deployment in data centres. The appliance can be customized by partners to work in public or private cloud environments thanks to its standardized service platform. At this time, the vendor also announced a new branded effort better known as the Cloud Essentials Pack and the Cloud Accelerate Program to help partners ramp up their cloud activities.

Hewlett-Packard Co. (NYSE: HPQ ) was another vendor that launched a cloud initiative to help partners ramp up their businesses this year. Called CloudStart , the all-in-one solution is designed to help partners deploy private clouds in just 30 days. The solution is made up of the HP BladeSystem Matrix and HP Cloud Service Automation software, in addition to data services which are provided by HP StorageWorks.

Paul Edwards, director of SMB and channel research at IDC Canada, said the small business market is the fastest growing market that’s adopting cloud-based computing solutions today.

“From a small business perspective, companies are looking at cloud-based offerings because these companies don’t have the IT staff that a medium-sized business would have,” Edwards said. “They also may not have the available capital to spend on on-premise solutions so with a cloud computing solution, they can pay monthly.”

Bryan Rusche, cloud services product manager at Microsoft Canada, said still, regardless of a business size, all organizations experience similar challenges and requirements and could stand to benefit from the cloud.

“SMBs look to cloud computing solutions because they want enterprise-class reliability and security, which is something they usually can’t afford on their own,” Rusche said. “With a cloud offering, the purchase cycle is predictable and it’s an easier cost to manage because it’s charged on a monthly basis. Cloud solutions are a lot less expensive for an SMB.”

Distributor Ingram Micro (NYSE: IM ) also showed its commitment to the cloud with the announcement of its new Cloud Conduit program , which is made possible through its partnerships with Amazon Web Services, RackSpace Hosting and The program includes cloud-specific enablement resources and tools for partners which include education, business development templates, sales training and more.

Renee Bergeron, vice-president of managed services and cloud computing at Ingram Micro North America, said from an overall North American standpoint, the IT industry is still in its “early adoption” phase of the cloud, but within the next couple of years, activity in this space is expected to accelerate.

To help its partners speed up their sales activities in the cloud, Ingram Micro developed its online resource portal for partners, dubbed the Ingram Micro Cloud.“The Ingram Micro Cloud is a marketplace we’ve created so a reseller can find all of the information they need in once place,” Bergeron said. “We’ve also included our vetted partners and aggregated all of the relevant information pertaining to the cloud.”

While the cloud offers a host of lucrative margin-making opportunities, Bergeron has one suggestion for partners who wish to play in and be successful in the cloud space.

“Really assess what your core competencies are today and look for cloud services that are complementary to that expertise,” she said.

“Don’t try to be everything to everyone. When it comes to the cloud, the reseller plays an important role in reducing complexity for customers by integrating solutions together. Stay close to your expertise and expand from there,” Bergeron added.

Move over netbooks, the tablet is in town

The cloud may be number one, but tablets also took a fair chunk of the IT spotlight in 2010. When you hear the word “tablet,” it’s almost synonymous with the Apple iPad , which enjoyed widespread adoption levels this year.

In keeping with the Top 25 format with one spot for a trend, as was the case last year with netbooks, the tablet takes the user experience to new heights with its touchscreen interface and slate form factor.

When the iPad arrived in April, Apple managed to achieve $3 million in sales within the first 80 days. And if that wasn’t enough, according to ChangeWave Research , within a few weeks, the iPad managed to take 16 per cent of the e-reader market, second to the already-established Amazon Kindle.

Shortly after Apple came out with the iPad, other vendors were quickly bringing their own tablets to the market to get in on the new opportunity.

Among some of the other tablet offerings include Research in Motion’s soon-to-be released BlackBerry PlayBook tablet, which features a seven-inch touchscreen and front and rear high definition cameras, and Cisco’s Cius device , which runs on the Android operating system, weighs just 1.15 pounds and features live streaming, real-time video, multi-party conferencing, e-mail, messaging, browsing and cloud services capabilities.

ViewSonic’s ViewPad 7 and ViewPad 10 tablets are designed for consumer and business users, and the Dell Streak, which is an Android-based tablet comes with a five-inch screen and features a five megapixel autofocus camera, and access to over 38,000 apps via the Android Marketplace.

According to IDC Canada, mini notebook (or netbook) shipments were down more than 100,000 units over Q4 in 2009.

“This sharp decline could be an early indication of shifting trends in the consumer segment,” Tim Brunt, senior analyst, personal computing at IDC Canada said. “Some of that shift is moving to full sized portables, but the majority is gravitating to media tablets.”

Follow Maxine Cheung on Twitter: @MaxineCheungCDN .

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